The government could consider relaxing the permanent establishment rules to attract fund managers who manage global investment funds to operate out of India.

India, in 2015, had introduced a special tax regime for offshore fund managers. The government had then said that an offshore fund would not be exposed to Indian tax on its global income just because its fund manager was located in India. In other words, taxation would not be dependent on where the fund manager was sitting -Mumbai, Hong Kong or Singapore. However, the government had put some conditions which the fund managers and foreign investors were required to abide by. Later, in 2016, the Central Board of Direct Taxes (CBDT) announced some leeway for such funds. However, most funds have still stayed away from moving to India, blaming local conditions that they termed as tough.

The issues cited by funds include the requirement to reveal the names of all investors and to make sure that Indian investors don’t have more than 5% of the total money held by the funds.Many big funds have claimed that while they can provide details of direct investors -which are often other funds -they have no visibility of indirect investors.

Typically, funds could have investors comprising global asset managers operating a fund of funds strategy or regulated and discretionary wealth managers allocating a part of the wealth managed by them on behalf of their clients. Asking the eligible funds to confirm indirect participation of resident Indians in such cases is practically impossible; the requirements ought to be limited to direct participants lion investment in the funds.

The intention to put such a condition was tripping. However, tax to curb round-tripping. However, tax experts said those fund managers sitting in India should have an equal ground with those outside.

Are there some issues under Section 9(A) of Income Tax Act which are keeping foreign funds from setting up base in India? The demand has been to relax the norms around the number of employees that the fund has to maintain in India and relax certain other norms around taxation of FPIs (foreign portfolio investors) in India.

The government may be considering offering some flexibility around transfer-pricing provisions, said tax experts. The problem now is that a fund may have tax implication if its manager is found to be charging more than 5% lower or higher than the average fee charged by others. Foreign funds are demanding that the onus here must only be on the fund manager and the funds must be ring-fenced.

Would the fee arrangements be subject to the transfer pricing provisions, since the fund and the fund manager are in any case deemed to be associated enterprises?

The Government of India had launched “Housing for All” in rural areas in November 2016 under which the government along with the Ministry of Housing and Urban Development proposes to provide an environment friendly and secure house to every rural household by 2022. The government had in June 2015 given its approval for “Housing For All, 2022” for urban areas which provided for rehabilitation of slum dwellers, promotion of affordable housing for weaker sections through credit-linked subsidy and subsidy for beneficiary-led individual house construction or enhancement.

The Ministry, in a bid to further fasten the programme stated that by 2020, 2 crores houses would be created in Rural Areas. According to the Ministry of Housing and Urban Development, a universal Affordable Housing scheme would give a big boost to the construction industry as 1.2 crore dwellings will be built in three years under urban component and another 1.02 crore units under its rural component by March 2019. The government had also announced a new PPP (Private Public Partnership) Policy for Affordable Housing that allows extending central assistance of up to Rs 2.50 lakh per house to be built by private builders even on private land, besides opening up immense potential for private investments in affordable housing projects on government land in urban areas.

The Madras High Court has appointed a nine-member committee to settle more than Rs 761 crore dues of about nine lakh investors who had deposited money with Tamil Nadu-based Disc Assets Lead India Limited, which is facing action against alleged violation of SEBI rules and regulations pertaining to purchase of plots over 10 years ago, which would be headed by a Former Chief Justice of Jammu and Kashmir High Court. The order was passed on a batch of petitions seeking the court’s intervention to settle the dues of the investors. The committee would comprise among others the amicus curiae, representatives of the state government and state police. The company had in 2006 floated schemes for purchase, development and maintenance of agricultural land by way of instalment payment and cash down plans. A total of over 12 lakh customers had invested about Rs 1,200 crore in the schemes, but they were neither allotted the plots nor refunded the deposit money. The Securities and Exchange Board of India (SEBI) had initiated action against the company as it had not obtained a certificate of registration as required under the SEBI Act and directed it not to collect deposits under the scheme. The SEBI had also barred its directors from floating any new schemes, disposing of the properties and diverting the funds of investors. The Economic Offences wing police had also registered a case against the company on a complaint from an investor. A report of former judge has revealed that a total of about Rs 1,137 crore was collected from 12,27,274 depositors. From this, an amount of Rs 761.97 crore was due to 9,05,765 investors. The court has issued further directions in this regard, whereby the depositors would have to approach the committee for their claims by submitting an application with details of their investments and supporting documents. The committee has been ordered to identify the properties of the company and its sister concerns, directors and transferees and arrange to sell them and appropriate the same, towards the claims of the investors. The bench has further restrained the company, its directors and sister concerns from transferring or alienating any of their properties and assets, except through the committee. Would the investors get back their money? Would the committee redress the grievances of the investors effectively?

The Non – Resident Indian, who are desirous of investing in properties in the State of Telangana can now do so from their homes in United States of America and other foreign countries. To make this a reality, the Panchayat Raj and Rural Development Officials are now chalking out plans to make the online building plans workable. The portal was to be launched before the Diwali, but the same has now been postponed, since the officials are contemplating adding more features to the building plan. The portal is currently being built up by the National Informatics Center. The another icing on the cake is that the NRIs can pay property tax online besides applying for online for drinking water supply tap connections. The Telangana government has planned to extent this online model to 8640 gram panchayats in the state and the proposed name for this project is palle seva kendram. The Government has already dispatched computers and other peripherals to the Villages, so that these kendrams could be set up. The offical sources also indicate that once the fibre grid project is complete, every home will have internet facility in villages. According to official sources the project is likely to provide employment to 10,000 rural men and women. However, would this promote and improve transparency in giving building permissions? What is the guaranteed workability of these projects?

The buyers of the Jaypee Wish Town have now demanded that the builder should submit Rs 15,000 crore in the Supreme Court to ensure the project’s completion.

The buyers, in a letter submitted to the amicus curiae, representing them before the National Company Law Tribunal have demanded that all flats be completed and handed over by December 2018. They have also demanded that future meetings be scheduled with insolvency resolution professional and members of the amicus curie team. Further, they have also requested that an escrow account be created with the buyers, for the protection of funds that are to be deposited by buyers with the builder in future. The Buyer’s association has stated that the insolvency proceedings have to first consider the buyers’ interest, as they are the victims in this insolvency bargain and that the buyers investments have to be protected. The Supreme Court had in an order issued in favour of protecting rights of home buyers in the insolvency proceedings of the company, directed the Company, Jaypee Group to submit Rs 2,000 crore by October 27. Why is this fear apprehended by the buyers of Jaypee Group? Is it due to the fact that despite filling forms to claim their dues in the resolution process, they could be wronged if their interests are not adequately protected during insolvency resolution, particularly when there are over 32,000 home buyers of Wish Town been affected by the insolvency bid raised against the builder at NCLT ?

One of the leading real estate research firms in India, had predicted that Chennai would be the real estate hotspot in India courtesy its high growth potential. However, after five years, Chennai instead of becoming a real estate hotspot has only become a real estate stale mate. Real Estate Consultants were bullish about the Chennai market in the year 2012, however, the 2015 floods, coupled with demonetisation and the recent political outburst brought Chennai to a stand still. Many investors are now turning on to states such as Maharashtra, Andhra Pradesh, Telangana, which according to a recent research report, the hotspot for real estate market. As urbanisation has picked up pace in the country, traditionally-preferred property investment locations in most main cities are getting saturated and increasingly expensive. In Chennai there is hardly any scope for improvement or appreciation in prices since the city on the whole is suffering from a plethora of reasons, the unstable political scenario being the primary reason. Investment in the industrial sector had dried up. There are no new IT parks that have come up in Chennai to house more companies and create new jobs. The dearth of jobs in city has led to lacklustre performance of Chennai Realty Sector. Does this mean that the city would trigger more housing demand, only if there are more jobs created? When would Chennai city wake up from its deep slumber?

New York based Private Equity Firm and Real Estate Advisory Firm, M/s. Greystone announced its plans to raise funds from Indian Investors seeking permanent residency in the US through EB 5 investor visa program. The Greystone EB – 5 program had been launched in the year 2015, to provide the foreign investors investment opportunity and investment services. Under the EB-5 programme, immigrant foreign nationals and their immediate family (children up to the age of 21) can obtain US green cards and permanent residency by making capital investment into one or more newly formed commercial enterprises that can create jobs in the US. The investment could range between $500,000 to $1 million. Each year, the US government grants 10,000 EB-5 visas to foreign nationals, most of them are Chinese investors so far. Through its EB-5 fund raising platform, Greystone is in talks to raise a total of around $57.5 million globally. So far $17.5 million has been raised from 35 investors. The company expects at least 20-30 investors from India investing through the platform. Would Indian investors, invest in the projects? Would this have any impact on the Indian Realty Sector, particularly, when new technological changes and advancements could be brought inside?

The Urbanisation in India has picked up pace, courtesy the new age property market and creation of better infrastructural amenities in the semi urban areas. However, the same has pushed back the traditionally preferred property investment in the major cities in India, which has become increasingly expensive and saturated. Even as more and more locations go out of the reach of a certain cross-segment of buyers that preferred it in the preceding years, other emerging areas come to their rescue. Moreover, with the expansion of business districts and different office space occupier categories preferring newer business premises to older ones, certain residential sub-markets in the primary cities have been finding favour from an increasing number of buyers and property investors. Is this trend due to the emerging areas in earlier stage of development can yield better results? For the residential property to reap good capital appreciation shouldn’t the entry point be less even as the potential for future growth in a reasonable period of time remains promising?

The Rajasthan Real Estate Regulatory Authority would now impose 10% of the project cost on developers who have not registered their ongoing projects with the regulatory authority till September 30.

The authority had given September 30 as the deadline to register ongoing projects after paying 2% of project cost as penalty, since the extended deadline is now over and that the regulatory authority would now increase the penalty rate by 8% and thereby impose 10% of the project cost and registration fee on developers to register their ongoing projects with RERA. Under section 3 of RERA Act, 2016 developers were provided 90 days to register after the Act came into effect on May 1 in the state. The RERA website online portal was launched on 1st June 2017. It became mandatory for all the builders and real estate agents to register on the website till July 31. However, on the request of developers an extension of one month was provided till August 31 to register with regulatory authority after depositing Rs 50 per square metre. The official sources quoted that in the past few months new project launches have come down by 80% in the state due to various factors such as demonetisation, GST and RERA.

Therefore would the realty sector gain momentum once the existing inventory would be sold? Would the sales increase now that the move by the Rajasthan RERA to penalise erring developers engineered with a view to eradicate non-serious developers from the realty sector?

A recent research report of two leading realty firms, has revealed that the Real Estate Jobs would increase by 80% by 2025 since the potential employment opportunities in the sector are expected at 17.2 million jobs by 2025 up from 9.2 million in 2016. What is the reason towards this prediction? The answer is economic contribution of the Realty Sector towards the GDP would increase significantly during the period from 6% in 2016 to 13% in 2025. Long term prospects appear highly positive for the sector, with a potential increase in completed space from 3.6 billion sq ft in 2013 to about 8.2 billion sq ft in 2025. The increase in jobs is also directly proportional to the increase in demand for new housing and the expanding urbanisation of tier II and tier III cities in the India. Does this mean that the increased urbanisation and economic contribution due to implementation of Regulatory laws, prime drivers for real estate growth? Would this predicted and projected expansion subject to effective utilisation of potential opportunities for growth? Wouldn’t effective implementation of the introduced regulations, by the Government also be a factor for projected growth?